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Abstract Sexually dimorphic tissues are formed by cells that are regulated by sex hormones. While a number of systemic hormones and transcription factors are known to regulate proliferation and differentiation of osteoblasts and osteoclasts, the mechanisms that determine sexually dimorphic differences in bone regeneration are unclear. To explore how sex hormones regulate bone regeneration, we compared bone fracture repair between adult male and female mice. We found that skeletal stem cell (SSC) mediated regeneration in female mice is dependent on estrogen signaling but SSCs from male mice do not exhibit similar estrogen responsiveness. Mechanistically, we found that estrogen acts directly on the SSC lineage in mice and humans by up-regulating multiple skeletogenic pathways and is necessary for the stem cell’s ability to self- renew and differentiate. Our results also suggest a clinically applicable strategy to accelerate bone healing using localized estrogen hormone therapy.